Transsion Holdings sold 32 million fewer phones in a year

Ask AI · Despite earnings halving, high dividends are maintained; how does shareholder structure influence decisions?

Revenue, net profit, and sales “all decline,” during the critical sprint phase of Hong Kong IPO, “Africa’s Mobile King” Transsion Holdings (688036.SH) is experiencing an unprecedented business winter since listing.

By the end of March, Transsion Holdings released its 2025 annual report. The financial report shows the company achieved operating revenue of 65.59B yuan for the year, down 4.5% year-on-year; net profit attributable to shareholders of the listed company was 2.58B yuan, a sharp decline of 53.49% year-on-year, with profitability “halved”; net profit attributable to parent company shareholders after deducting non-recurring gains and losses further fell 56.58% to 1.97B yuan, marking the largest drop in recent years.

Reviewing past performance, the last time Transsion fell into a profit trough was in 2022, when net profit attributable to the parent was 2.48B yuan, down 36.46% year-on-year. From 2023 to 2024, the company’s performance steadily recovered, with net profit remaining above 5.5 billion yuan for two consecutive years, but in 2025, its operating situation again sharply deteriorated.

The declining performance also affected terminal sales: in 2025, Transsion’s overall mobile phone shipments were about 169 million units, a 16% decrease from 2024’s 201 million units, with a sharp drop of 32 million units in annual sales. Even in its home market of Africa, where it remains the top in smartphone shipments, the situation has become “under siege.” Omdia research shows that in 2025, Transsion’s smartphone shipments in Africa reached 40.5 million units, a 7% increase year-on-year, lower than Samsung’s 10% and Xiaomi’s 27%, and far behind Honor’s 144% growth.

Earnings Halved

In September 2019, Transsion Holdings successfully listed on the STAR Market, becoming the second domestic mobile phone company after Xiaomi Group.

However, the latest disclosed 2025 financial report shows that, for the first time since listing, Transsion’s annual net profit experienced a “halving” decline. Facing a net profit drop of over half, Transsion attributed the decline to sharp increases in the prices of storage and other components, directly raising product costs, which pressured both revenue and gross margin.

In fact, Transsion’s difficulties are not unique; behind it is the industry-wide cyclical upturn in the global storage chip market. As a core cost component of mobile phones, fluctuations in storage chip prices directly impact the overall cost structure and pricing strategies of devices. The ongoing rise in NAND Flash (used in solid-state drives) and DRAM (dynamic random-access memory) contract prices is creating widespread cost pressures for global phone manufacturers.

“Consumers in emerging markets are highly sensitive to phone prices, with the core competition in the 1,000 yuan and below price segment, where storage chips account for over 20% of the cost in mid- to low-end models, far higher than in high-end models,” a person in the mobile industry chain previously told reporters. “Transsion has relatively limited layout in high-end products and lacks the ability to offset low-margin pressures with high-margin models. This product structure, combined with a weaker market positioning, makes it particularly vulnerable to industry-wide cost shocks.”

Omdia chief analyst Manish Pravinkumar mentioned in a related report that the African smartphone market is expected to enter a correction phase in 2026, with shipments forecast to decline by 23% year-on-year. “In 2025, 81% of shipments are concentrated in the sub-$200 price range, which is highly sensitive to component cost increases. As prices rise, prepaid users and first-time buyers may delay upgrades or switch to lower-spec or refurbished models.”

In addition to the sharp decline in net profit, Transsion’s cash flow has also been halved. The financial report shows that in 2025, net cash flow from operating activities decreased by 50.13% year-on-year to 1.42 billion yuan. Regarding the cash flow reduction, Transsion explained that it was mainly due to decreased revenue, reduced sales collection, and increased payments for procurement during the year, leading to higher outflows.

Ultimately, the core factor dragging down Transsion’s performance remains sales volume. According to the 2025 production and sales data, the company’s mobile phone business shows a “shrinking volume” trend.

From the production side, the total mobile phone production volume for the year was 167 million units, down 15.22% from 197 million units in the previous year; sales dropped from 201 million units in 2024 to 169 million units, a 16.09% decrease. Meanwhile, end-of-year inventory was 12.9886 million units, down 13.52% year-on-year, with inventory levels shrinking accordingly.

The continued weak growth momentum is also reflected in Transsion’s global industry ranking decline.

Canalys (now integrated into Omdia) data once showed that in Q2 2023, supported by a recovery in the African market and expansion into multiple overseas regions, Transsion temporarily surpassed brands like vivo and Honor, ranking fifth globally among smartphone manufacturers. IDC reports also indicated that in 2023, Transsion’s shipments increased by 30.8% year-on-year, maintaining fifth place globally, and in Q4, it even rose to fourth. In 2024, the company further advanced, surpassing OPPO to enter the top four globally. However, in 2025, with a significant decline in overall shipments, Transsion ultimately fell out of the top five, becoming “others.”

Dividends Maintained

As a Chinese mobile phone manufacturer that has long dominated half of the African market, Transsion’s rise has always been closely linked to its founder, Zhu Zhaojiang. The current chairman and general manager, Zhu Zhaojiang, was born in 1973 in Ningbo, Zhejiang, and graduated from Nanchang Hangkong University. In 1996, he joined Bird, starting as a pager sales clerk; in 2003, he was transferred overseas to develop international markets. In 2006, Zhu Zhaojiang keenly perceived the potential of the African market, left Bird, and founded Transsion Technologies, officially embarking on the overseas route.

That same year, Transsion quickly launched the “TECNO” mobile brand and released its first product, TECNO T201, targeting mass-market smartphones and beginning sales in Africa. The following year, Transsion adopted a dual-brand strategy in Africa, launching the “itel” brand. TECNO mainly targets middle-class consumers, while itel focuses on ultra-cost-effective low-end markets. In 2013, Transsion launched its third brand, Infinix, focusing on young, fashionable demographics. The three brands’ differentiated positioning helped Transsion firmly establish its leading position in the African mobile phone market.

Looking at the capital market cycle, after listing on the STAR Market in 2019, Transsion entered a fast growth phase, with continuous expansion: revenue rose from 25.35B yuan at listing to a peak of 68.72B yuan in 2024, and net profit attributable to shareholders also reached a high of 5.55B yuan. But by 2025, due to rising costs and intensified overseas competition, Transsion’s performance sharply declined, with revenue and profit both falling back, halting its growth trend.

Notably, despite the performance slowdown, Transsion still maintained a relatively high dividend payout.

At the end of March, Transsion disclosed its 2025 profit distribution plan, proposing a cash dividend of 9 yuan per 10 shares (tax included). Based on the current total share capital, the company plans to distribute a total of 1.04B yuan in cash dividends, accounting for 40.15% of the net profit attributable to shareholders that year. In mid-2025, it had already paid out 8.00 yuan per 10 shares (tax included), totaling 912 million yuan. The total annual dividend payout reached 1.95B yuan, accounting for 75.5% of that year’s net profit, nearly matching its net profit after deducting non-recurring gains and losses (1.97B yuan).

Wind data shows that since its listing in 2019, Transsion has achieved a cumulative net profit of 24.54B yuan and a total dividend payout of 14.27B yuan.

Behind the large dividends, the concentrated ownership structure has benefited the actual controller and related shareholders. Currently, Transsion’s controlling shareholder is Shenzhen Transsion Investment Co., Ltd. (“Transsion Investment”). As of the end of 2025, Transsion Investment held 46.71% of shares. Based on this, more than 6 billion yuan of the total dividends flowed into the controlling shareholder’s hands.

Tianyancha’s public information shows that Transsion Investment has 38 individual shareholders, including the company’s actual controller and chairman Zhu Zhaojiang, who holds 20.68% of the shares. Based on this shareholding ratio, since listing, Zhu Zhaojiang has personally received dividends exceeding 1.2 billion yuan.